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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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CHAPTER 4

PRODUCTION/ OPERATIONAL STRATEGY

4.1 Description of company's production/ operation

House of Cupcakes (HoC) is a neighbourhood cupcake business that will be based in Shah Alam, Selangor. The HoC shop is scheduled to begin operation on 18th August 2018.  Although we intend starting out from small in – house bakery, but that does not in any way stop us from maximizing our potential in the cupcake line of business. We hope to grow the business beyond Shah Alam to other cities in the State of Selangor and Kuala Lumpur.

Our manager, _____________________ and assistant manager, ________________, both have Bachelor Sciences in Food Science Technology and a Master's Degree in Business Administration (MBA). They have a robust experience in the food and confectionaries business having worked both in the public sector and the private sector prior to starting their own cupcake baking and retailing business.

Our business goal as a community based cupcake baking and retailing business is to become the number one choice of residence in the whole of the communities where we intend to retail our cupcakes. We are extremely creative, which is why we will come up with cupcakes in different designs, different variants, different themes, and different flavours and of course different packaging just to appeal to our target market. Our products are hand made from scratch with the highest quality of ingredients such as eggs, sweet creamy butter, whole milk, cream, seasonal fruit, cocoa, vanilla and plenty of love. At HoC we carefully prepare and bake our cupcakes and treats fresh from scratch every day. Our treats are perfect for Weddings, birthdays, graduations, corporate events and also any events.

Innovations will also be a goal of HoC way in which this will be conquered is through creating new flavours of cupcakes. Each month, HoC will offer a new cupcake as the cupcake of the month. Each month will offer a novel cupcake flavour for a limited time. This will allow the business to test new products and determine whether or not they are liked by consumers. The bakers will be responsible for trying new recipes for the featured products.

Similar to the cupcake of the month, HoC will also provide seasonal cupcakes which will only be available for a limited time. The bakers will formulate possible flavours for each month and once the business determines which cupcakes are liked by consumers, it will choose two or three cupcake flavours, matching the season, to be available for that time. For example, a cupcake flavour that may be offered throughout the school holiday would be cartoon creation. Likewise, a cupcake only available in the Christmas season may be design like a gift creation. Each year the same seasonal cupcake flavours will be offered, providing consistency and giving consumers something to look forward to.

As part our strategy to create multiple sources of income in line with our core business concept, we will run an in – house and community based consultancy service and trainings as it relates to cupcakes and other baked foods. Our intention of starting HoC is to make profits from the industry and we will do all that is permitted by the law to achieve our aim and ambition.

The HoC shop will be located at No. 130, Jalan Plumbum N7/N, Selangor, 40000 Shah Alam. Operation hours start from 10am until 9pm. The office space is leased and will accommodate the necessary office equipment such as computers, telephone, fax machine, photo copier and other machine and also bakeries equipment. Below is an example of our product and description for beginning operational.

Products

Descriptions

Red Velvet

Red velvet cupcake with just a hint of  Valhrona cocoa, topped with melt in your mouth cream cheese frosting and sprinkles or fondant heart.

Confetti

Madagascar Vanilla cupcake with rainbow sprinkles inside and out topped with creamy whipped vanilla buttercream.

Cream Filled Chocolate Ganache

Valrhona chocolate cupcake filled with creamy vanilla buttercream then double dipped in rich chocolate ganache and topped with buttercream ribbon

Cookies and Cream

Valhrona chocolate cupcake topped with whipped vanilla buttercream and dipped in crushed oreos

Blackberry Cheesecake

Madagascar Vanilla cupcake sits atop a buttery graham crust, filled with blackberry filling and topped with cheesecake frosting and a blackberry

Cherry Cheesecake

Madagascar Vanilla cupcake sits atop a buttery graham crust, filled with plump cherries and topped with cheesecake frosting and a cherry

Pancake Maple Bacon

This two inch pancake is topped with creamy maple frosting, drizzled with maple syrup and dipped in crunchy bacon

Wet Coconut

Vanilla coconut cupcake infused with coconut cream,  topped with creamy coconut frosting and flakes of coconut

Chocolate Birthday

Valrhona chocolate cupcake topped with vanilla buttercream, rolled in rainbow sprinkles and topped with a heart

Carrot

Light and moist cupcake loaded with fresh carrots and pineapple chunks topped with cream cheese frosting and green and orange sprinkles

Grasshopper

Valrhona chocolate cupcake glazed with chocolate ganache and topped with a light creme de menthe buttercream and chocolate shavings

German Chocolate

Valrhona chocolate cupcake topped with traditional german chocolate frosting loaded with coconut and pecans and drizzled with melted chocolate

Banana Cream

Banana cupcake sits atop a vanilla wafer crust, filled with

fresh vanilla cream & topped with whipped vanilla buttercream  and vanilla wafer crumbs

Double Chocolate

Valrhona chocolate cupcake topped with chocolatebuttercream, chocolate drizzle and curls

Snickers

Valrhona chocolate cupcake with vanilla buttercream loaded with chopped snickers pieces, topped with more snickers, chocolate and caramel drizzle

Chocolate Chip Cookie Dough

Valrhona chocolate cupcake filled with chocolate chip  cookie dough and topped with stars of vanilla buttercream and chocolate drizzle

Peanut Butter Crunch

Valrhona chocolate cupcake topped with whipped Peanut Butter Buttercream, drizzled with chocolate and topped with crunchy peanuts

Chocolate Cheesecake

Valrhona chocolate cupcake filled and baked with chocolate chip cheesecake filling, topped with cheesecake frosting and chocolate chips

Butterfinger

Valrhona chocolate cupcake with butterfinger buttercream and crushed butterfinger pieces

Monster Cookie

Peanut Butter chocolate chip cookie cupcake with cream cheese cookie dough frosting loaded with Peanut Butter,M & M's, Oats & Mini Chocolate Chips

White Chocolate Raspberry Almond

Almond cupcake filled with raspberry filling, topped with white chocolate buttercream, shaved white chocolate & sliced almonds

Tiramisu

Kahlua and espresso soaked vanilla cupcake filled with pastry cream, topped with Kahlua/ Espresso cream cheese/buttercream, cocoa powder and chocolate curls

Strawberry Cheesecake

Madagascar Vanilla cupcake sits atop a buttery graham crust, filled with fresh strawbery filling and topped with cheesecake frosting and a strawberry

Hummingbird

A southern classic! This cupcake is loaded with chopped bananas, crushed pineapple, pecans and cinnamon then topped with cream cheese frosting and pecans.

Toasted Coconut

Valrhona chocolate cupcake topped with coconut buttercream, rolled in toasted coconut and drizzled with chocolate

Blueberry Lemon

Vanilla cupcake loaded with fresh blueberries, topped with lemon buttercream, lemon zest and a fresh blueberry

Nuddy Buddy

Valrhona chocolate cupcake topped with vanilla buttercream, dipped in chocolate ganache and rolled in crushed peanuts

4.2 Manufacturing/ production process planning

 Love House of Cupcakes (LHoC) baking out hundreds of products a day. The products must be uniform in size, shape and appearance in order to pass quality control tests, and this is achieved with the full training of all staff. Commercial mixers, fillers and ovens combine to process a high volume of products as consistently as possible.

4.2.1 Operational planning

4.2.1.1 Prepare cupcake Ingredients

Our cupcake use a batter made from wheat flour, fat, eggs, sugar, milk powder, water, flavourings, preservatives such as sulphur dioxide and raising agents such as sodium carbonate. The ingredients are combined in either the sugar batter or flour batter methods. In the sugar batter method, the fat and sugar are creamed together, followed by the liquid then the flour. In the flour batter method, the fat is blended with the flour before being gradually mixed with the eggs and sugar.

4.2.1.2 Mixing the Batter

The batter is mixed in a commercial mixer. Once all the ingredients are combined, the mixer continues to beat the mixture for a further 10 minutes in order to trap in air and allow the cake to rise properly. The air works in conjunction with the added raising ingredient and the cake will grow in size during the baking process. Once the mixing is completed, the batter is turned into a mold for baking.

4.2.1.3 Filling the Mold

The baking mold is sprayed with a thin layer of oil, which prevents the batter from sticking to the mold during the baking process. The mold is then filled with batter via special equipment, which monitors the shape, weight and level of the batter.

4.2.1.4 Baking

Once full, the molds are taken to oven. The temperature and humidity of the oven are carefully regulated to produce the best result for the cake type so that it cooks evenly and thoroughly. To prevent the surface of the cake from cracking during the initial rising process, the crust is sprayed with water to make it more flexible. Once the cake has fully risen, the crust is allowed to dry and take on its baked coloring.

4.2.1.5 Cooling Down

After baking, the cake must be thoroughly and carefully cooled so that it does not collapse. As the cake cools, it releases moisture into the air that is removed by powerful suction pumps in the room so that no condensation forms.

4.2.1.6 Setup dressing and decoration

Cupcakes may be topped with frosting or other cake decorations. They may be filled with frosting, fruit, or pastry cream. Elaborately decorated cupcakes may be made for special occasions.

4.2.1.7 Stripping and Packaging

Once the cake is completely cool, it is released from its mold and packaged so that it will be ready for transportation. The cake must be completely cool before packaging, or condensation will form and damage the product. Our cupcakes will wrap in a cardboard tray.

4.2.2 Production planning

Capacity production of cupcakes should be refers to the amount of output that can be produced within a specified time frame. For daily production, we are required to produce around 120 units of cupcake not included ordered 500 to 1000 cupcakes from other event such as Birthday Party, Wedding Ceremony and others event.

Process

(For daily production)

Time (minutes)

Staff allocate

Preparation all ingredient for 120 cupcakes

10

1

Mix all ingredient and ensure the dough is in best quality

10

1

Preheat oven to 190c; line muffin cups with papers

10

1

Divide evenly among pans (10 pans for 120 cupcake)

15

2

Bake.

25

2

Cool all the cake in pans.

90

1

Setup dressing and decoration

30

2

Packaging

20

2

Total hours for produce 120 cupcakes

3 hours

Process

(For special event)

Time (minutes)

Staff allocate

Preparation all ingredient for 500- 1000 cupcakes

20

2

Mix all ingredient and ensure the dough is in best quality

20

2

Preheat oven to 190c; line muffin cups with papers (4 ovens)

10

1

Divide evenly among pans (10 pans for 120 cupcake) – repeat 4 times

60

3

Bake – repeat 4 times using 2 ovens

100

2

Cool all the cake

120

2

Setup dressing and decoration

90

4

Packaging

60

4

Total hours for produce 120 cupcakes

8 hours

4.3 Manufacturing/ production process work flow (flow chart)

4.4 Physical plant- site plan and layout

Plan layout and sizes

Description

1. Sales layout (25 X 10 sqf)

- Cashier

- Cupcakes layout

- Table

- Stool

2. Preparation Kitchen (18 X 10 sqf)

- Water dispenser

- Sink

- Ovens

- Refrigerator

- Mixers

- Decoration table

- Compact bakery depositor

3. Office (7 X 6 sqf)

- Computer

- Table/ Chair

- Sofa

- Cabinet

4. Toilet (7 X 5 sqf)

- Sink

- Toilet bowl

- Shower

4.5 Proximity to suppliers and access to transportation

House of Cupcakes will at all times demonstrate our commitment to sustainability, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers' needs precisely and completely. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our customers.

To meet all the approach, we have to look forward to our suppliers and also access to transportation. We got list of suppliers that we trust and can give well co-operation to us. All items or material are easy to be reach because certain suppliers are nearest from our site location. This is important to give full commitment to our customer when the orders have taken.

For transportation, we have two cars to distribute and deliver customer's orders promptly and to pick up any material or ingredients using for cupcakes making. For future plan, possibility to add another one vehicle such as van to reach the far suppliers and customers.

    

4.6 Machinery and equipment

Num

Machinery and equipment

Description

1

Electric convection oven designed to bake all types of breads, pastries and Danish products.

2

Bench top oven for small amount of cupcakes.

3

Commercial 5-quart mixer. To mix all the dough before ready to bake.

4

Freezers allow the positive or negative preservation of temperatures within a very short time and will achieve a stable product at a given temperature.

5

The Compact bakery depositor, available in table top, mobile or power lift models, is the ideal bakery equipment for affordable depositing, featuring plenty of speed and power. With a small foot print, user – friendly features and portable options, this batter depositor is ideal for portioning accurate deposits for muffins, cupcakes, cakes, pastry, pie, etc.

6

The lower temperature lowers the reproduction rate of bacteria, so the refrigerator reduces the rate of spoilage. A refrigerator maintains a temperature a Optimum temperature range for perishable food storage is 3 to 8 °C.

7

Others equipment

Mixing and measuring supplies

-Measuring cups and spoon

-Mixing bowls

Pans and molds

-Baking molds

-Muffin and cupcake pans

-Cream horn molds

-Cannoli forms

Small Preparation Tools and Supplies

-Cream whippers, dispenser and charges

-Double boilers

-Flour sieves and flour sifters

-cooling racks

-Whisks and cooking whips

-Rolling pins and pastry accessories

-Turners and spatulas

Scooping flour or measuring out the perfect amount of flavouring extract.

These pans and molds are the perfect tools for shaping dough or batter into perfectly formed treats.

Small preparation tools and supplies includes everything need to whip cream, sift flour, roll dough, and complete other tasks.

4,7 Material planning- raw materials

Num

Item

Price 1000 cupcakes/ daily

Total price (RM)

For 1 month

1

Corn starch

12.5

375

2

Flavoring syrups

5.5

165

3

Baking soda

12.5

375

4

Bulk flour

5.5

165

5

Bulk sugar

10

300

6

Baking toping

12.5

375

7

Baking powder

7

210

8

Brown sugar

14.25

427.5

9

Corn syrup

7.5

225

10

Powdered sugar

15.25

457.5

11

Ready to use cake mixes and cookies mixes

12.5

375

12

Salt and pepper

2.5

75

13

Spray releases and seasonings

17.5

525

14

Yeast

20

600

15

Extracts and imitation flavoring

20

600

16

Egg

17.5

525

17

Butter

16.25

487.5

18

Icing

18.75

562.5

19

Whipping cream

10

300

20

Cream cheese

12.5

375

Total

250

7500

4.8 Name and suppliers of raw materials

Num

Name of suppliers

Address

1

Bakels (Malaysia) Sdn. Bhd.

Lot 4009, Shah Alam, Malaysia, Jalan Pendamar 27/90, Taman Bunga Negara, 40400 Shah Alam, Selangor

2

Honeyberry Production

D-9-11, 9th Floor, Block D, Kelana Square, No. 17, Jalan SS7/26A, Kelana, Jaya,, 47301 Petaling Jaya, Selangor

3

Bake With Yen Puchong

30 & 32, Persiaran Puteri 1, Bandar Puteri, 47100 Puchong, Selangor

4

BAGUS Marketing Sdn Bhd

68, Jalan Rugbi 13/30, Seksyen 13, 40100 Shah Alam, Selangor

5

Whisk Ingredients Supply

No. 13, Persiaran Jubli Perak, Pusat Perdagangan Suri Puteri, Seksyen 20, Selangor, 40300 Shah Alam

6

Cake Jalan Tiung

Ground Floor, No. 11,, Jalan Judo 13/45, Seksyen 13, 40100 Shah Alam, Selangor

7

Igorgeous Cupcakes

4, Jalan Setia Prima C U13/C, Setia Alam, 40170 Shah Alam, Selangor, Malaysia, 40170 Shah Alam

4.9 Manpower planning

As part of our plan to build a top flight community based cupcake baking and retailing business in Shah Alam, Selangor and Kuala Lumpur, we have perfected plans to get it right from the onset which is why we are going the extra mile to ensure that we have competent employees to occupy all the available positions in our company. Below is the business structure that we will build House of Cupcakes on;

Num

Positions

Manpower

1

Chief Executive Officer

1

2

Bakery Manager

1

3

Human Resources and Admin Manager

2

4

Sales and Marketing Officer

1

5

Accountants / Cashiers

1

6

Bakers / Casual Workers

3

7

Drivers / Distributors

1

8

Customer Service Executives

1

9

Cleaners

1

Total

13

The importance of embedding project based manpower planning in the context of a strategic framework cannot be overemphasised, and the monitoring and evaluation process should include a link with high-level group considering overall manpower strategy.

4.11 Production/ operational budget

When it comes to starting a cupcake business, loads of factors influences the amount that will be required to successful launch the business. To starting our cupcake business, we should be required to fulfill most of the items listed below;

The Fee for registering the business

RM70/annum

The budget for legal fees, insurance, permits and license

RM2400/annum

The amount needed to build a standard in – house bakery and renovation of the facility inclusive

RM20000

The Cost for the purchase of kitchen / baking equipment and gadgets (industrial ovens, fridges, smoke detector, TVs, microwave oven, Pans, Foils, Sound System, tables and chairs, computer et al).

RM40000

The Cost for supply of flour and other baking ingredients for a month

RM7500/ month

The Cost of Launching and opening party

RM3000

Additional Expenditure (Business cards, Signage, Adverts and Promotions et al)

RM1000

Going by the report from our research and feasibility studies, we will need an average of RM50,000 – RM80,000 to start a small scale but standard cupcake business.

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